Retirement planning isn’t just about building your nest egg—it’s about protecting your retirement savings from unexpected risks. One of the biggest of those risks? The steep and often overlooked cost of long-term care. If you’re retired or a business owner in Louisiana, Alabama, Florida, Georgia, Mississippi, Oklahoma or Texas (and I’m talking directly to you), this is a conversation you can’t afford to skip.
In this article, I’ll walk you through how long-term care costs can quietly erode your financial security, why traditional health insurance and Medicare fall short, and how Long-Term Care Insurance (LTCI) can be a smart part of your retirement planning strategy—especially here in the Southeast.
Why Retirement Planning Must Include Long-Term Care Costs
Aging and the growing likelihood of needing care
Most of us like to think of retirement as a time of freedom—but the reality is, as we age, the odds of needing help with everyday tasks increase. In fact, around 70% of people age 65 and older will need some type of long-term care during their lifetime.
That means when you’re doing your retirement planning, you’ve got to think not only about market risk and longevity—but also the risk of needing care and how to pay for it.
The high and rising cost of long-term care
Here’s where things get sobering:
- According to one survey, the national median annual cost of in-home care with a home health aide reached about $77,000 in 2024.
- A private-room stay in a nursing home climbed to about $127,750 per year in 2024.
- Many people underestimate how much long-term care will cost: a study found that many Americans expected under $50,000/year—but actual average costs were well above $120,000/year.
Even in more affordable states, long-term care costs are significant. For example, one guide pegged the average annual cost in Louisiana at around $54,105 (a relatively lower number but still a large expense).
When you consider these costs, it becomes clear that if you don’t plan proactively, you risk using up your retirement savings simply to survive.
The erosion of retirement savings
Let’s say you retire with $500,000 in retirement assets (IRAs, 401(k)s, other investments). You’ve run your retirement planning—great. But then you qualify for in-home care that costs $70,000/year or a nursing home that costs over $100,000/year. Suddenly, part of your nest egg starts being drained not by market downturns—but by care costs.
If you didn’t plan for it, it could reduce your retirement income, force you to downsize your lifestyle, or compromise the legacy you hoped to pass to your heirs or your business. That’s why protecting retirement savings needs to include planning for long-term care.
Why Traditional Insurance and Medicare Aren’t Enough
Medicare & Medicaid: The gap
A common misconception is that Medicare or Medicaid will cover all long-term care. Unfortunately, that’s not the case.
- Medicare only pays for very limited skilled nursing or home health services for a short period (after a hospital stay) and doesn’t cover custodial care—help with bathing, dressing, eating, toileting.
- Medicaid will cover long‐term care only if you meet strict income and asset eligibility rules. That often means you’ve already depleted most of your savings.
So: relying on health insurance, Medicare, or even assuming you’ll qualify for Medicaid is not a reliable retirement plan when it comes to long-term care.
Self-funding: A risky strategy
Yes, some retirees plan to self-fund care out of savings. But budgets can be blown by just a few years of expensive care. One report noted that for many people, average out-of-pocket long‐term-care costs reached over $44,800 per person—and many expected care to cost far less.
If your retirement planning doesn’t factor in the “what-if I need care” scenario, you risk using retirement assets you intended for income, legacy, or business transition.
How Long-Term Care Insurance Protects Your Retirement Savings
So how does long-term care insurance (LTCI) fit into retirement planning to protect retirement savings? Here are key ways it works:
1. Transferring risk
Just like any insurance plan transfers risk you don’t want to bear alone, LTCI transfers the risk of high long-term care costs from your retirement savings to the insurance company. This protects the assets you’ve built—your 401(k), retirement accounts, investments.
2. Preserving retirement income and legacy
By helping pay for care, LTCI helps keep more of your retirement assets intact. That means better protection for your lifestyle, better flexibility in retirement planning, and less risk that you’ll have to sacrifice your goals (travel, legacy, business succession, giving) to cover care costs.
3. Flexibility for business owners
If you own a business in Louisiana, Georgia, Texas or other states—LTCI can give you peace of mind that your business transition or exit strategy won’t be derailed by personal care costs. It frees you up to focus on growth, planning for retirement from your business, and wealth management—without the “what if I need care” cloud hanging over you.
4. Quieter, lesser-known protection
Many people focus on term life, whole life, annuities, social security planning—but don’t give LTCI the attention it deserves. But given rising care costs, Long Term Care Insurance often becomes a “hidden hero” in a complete retirement planning strategy. A report states that the best time to buy LTCI is in your mid-50s if you’re in good health.
Practical Steps for Business Owners and Individuals in the Gulf South Region
If you’re living or working in Louisiana, Alabama, Florida, Georgia, Mississippi, Oklahoma or Texas, here are actionable steps to integrate Long Term Care Insurance into your retirement planning:
- Review your retirement savings & projected lifestyle: Determine how much you expect to have earmarked for income, and what buffer you want for care.
- Estimate long-term care costs in your state: While national figures are eye-opening, local costs may vary. For example, Louisiana’s average was lower than national in one guide ($54K/year) but that doesn’t guarantee your personal cost will stay that low.
- Engage a retirement planning professional: At One Stop Financial Group, we help individuals and business owners review life-insurance and retirement planning options—including LTCI.
- Explore LTCI policy features: When you look at policies, consider benefits such as home care coverage vs. just nursing home, inflation protection (since costs rise over time), and how premiums fit into your budget.
- Integrate LTCI into your overall plan: Place LTCI alongside your life insurance, business succession planning, 401(k)/annuity strategy, and tax planning so you have a comprehensive retirement protection strategy.
Conclusion: Plan Today, Protect Tomorrow
When you think about retirement planning, thinking only about investments or savings isn’t enough. If you don’t address the financial reality of long-term care costs, you risk watching your retirement savings shrink in ways you didn’t anticipate. By proactively integrating a long-term care insurance strategy, you’re giving yourself a stronger chance of enjoying retirement the way you envisioned—whether that’s travel, business transition, legacy building or simply peace of mind.
If you’re in Louisiana, Alabama, Florida, Georgia, Mississippi, Oklahoma or Texas and you’re ready to protect your retirement savings with smart, region-specific planning, let’s connect. Contact me at One Stop Financial Group for a consultation and let’s build a retirement action plan that truly covers all the right bases—including long-term care.
Article Sources
- CareScout Cost of Care Survey 2024 – carescout.com
- National Council on Aging – ncoa.org
- RetireGuide – State-by-State Long-Term Care Costs – retireguide.com
- Money.com – “Americans Underestimate Long-Term Care Costs” – money.com
- SingleCare – Long-Term Care Statistics – singlecare.com
